Optimization of sample size and order size in an inventory model with quality inspection and return of defective items

Abstract

To ensure all products as perfect, inspection is essential, even though it is not possible to inspect all products after producing them like some special type products as plastic joint for the water pipe. In this direction, this paper develops an inventory model with lot inspection policy. With the help of lot inspection, all products need not to be verified still the retailer can decide the quality of products during inspection. If retailer founds products as imperfect quality, the products are sent back to supplier. As it is lot inspection, mis-clarification errors (Type-I error and Type-II error) are introduced to model the problem. Two possible cases are discussed for sending back products as defective lots are immediately withdrawn from the system and send back to supplier with retailer's payment and for second case, retailer sends defective products during receiving next lot from supplier with supplier's investment, like in food industry or in hygiene product industry. The model is solved analytically and results indicate that optimal order size and sample size are intrinsically linked and maximize the total profit. Numerical examples, graphical representations, and sensitivity analysis are given to illustrate the model. The results suggest that sending defective products maintaining the first case is the more profitable than the second case.

Quality Management by Warranty Contract Under Dual Asymmetric Information

“…[24] examined optimal inspection-based preventive maintenance policy for three-state mechanical components under competing failure modes. [25] developed an inventory model with lot inspection-based policy and found that optimal order size and sample size were intrinsically linked and maximize the total profit. Different from the aforementioned previous studies, we contribute to this line of research by modelling the quality improvement incentives under uncertainty theory rather than probability theory, as none of supply chain members' effort choices is observable while there is information asymmetry with regards to the supplier's inherent quality level.…”

Optimal Policy for a Green Production System with Quality Inspection and Warranty Cost Under Environmental Regulations

“…A comprehensive literature review can be found in Sarkar and Saren (2016). Cheikhrouhou et al (2018) also consider lot inspection policy instead of full. Inspection errors are also considered in the model and the consequence of these errors is dealt in two ways.…”

The Overlooked Dependencies of Material Flows on Quality and Quality Assurance

“…The work of Eben-Chaime [14] is, perhaps the first step in this direction (and note the difference between the analysis in [14] and the incomplete/imperfect analysis in Appendix A of [6]), but even in this work inspections and inspection errors are disregarded. A common method for coping with defective items is to make inspections (e.g., [15][16][17][18][19]). Nevertheless, focusing on quality, most studies on inspections (e.g., [17][18][19]) concentrate on error type IImissed defective units, while taking no notice of the waste which is associated with type I errors -false rejections.…”

“…A common method for coping with defective items is to make inspections (e.g., [15][16][17][18][19]). Nevertheless, focusing on quality, most studies on inspections (e.g., [17][18][19]) concentrate on error type IImissed defective units, while taking no notice of the waste which is associated with type I errors -false rejections. Very few studies, if any, consider assembly system quality with inspections and inspection errors of both types.…”